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UBS Outlook Switzerland Q2 2010 - Immigration counteracts weak growth
Since 2004, the economy in Switzerland grew faster than in the Eurozone by around one percentage point each year. The economists at UBS Wealth Management Research (WMR) have identified immigration from the EU as one driver of growth.
The implementation of unrestricted personal mobility between Switzerland and the 15 old EU member countries in 2007 led to increased immigration of well-qualified individuals from the EU to Switzerland. Since population growth of one percent produces additional consumer growth of 1.3%, immigration has a positive effect on Switzerland's growth dynamics. This is the conclusion by WMR in the latest issue of "UBS Outlook Switzerland." WMR anticipates immigration from the EU to continue in the years to come. "We see no reason why immigration should recede significantly in the coming years," writes WMR.
Recovery in chemicals is far advanced
The latest survey results published by WMR in "UBS Outlook Switzerland" and the UBS economic indicator show that most industry sectors are continuing to recover. The economic revival is particularly far advanced in the chemicals industry. Watchmakers have surprised with large jumps in incoming orders. The upswing is less pronounced in the services sector according to surveyed companies. The companies expect their revenue to rise slightly in the second quarter and to hold their workforces steady.
The UBS economists forecast economic growth of 2.5% for the current year. In view of the strong franc and rising interest rates, growth is likely to be 2.1% next year.
Major growth reported in the United States and China
A glance abroad shows that the US economy is growing rapidly, with a possible V-shaped recovery. UBS is forecasting 3% growth for 2010. The Eurozone, meanwhile, came close to stagnating in the fourth quarter of 2009. As a result, forecasts for 2010 predict growth of just 1.5%. Led by China, the economies of emerging markets are growing very strongly (forecast for 2010: +10%).
Caesar Lack, Economics & Swiss Research
Phone +41 44 234 44 13
Carla Duss, Economics & Swiss Research
Phone +41 44 234 21 19
UBS publications and forecasts for Switzerland: www.ubs.com/economicresearch